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Evidence for the Gompertz curve in the income distribution of Brazil 1978–2005

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  • N. J. Moura
  • M. B. Ribeiro

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Abstract

This work presents an empirical study of the evolution of the personal income distribution in Brazil. Yearly samples available from 1978 to 2005 were studied and evidence was found that the complementary cumulative distribution of personal income for 99% of the economically less favorable population is well represented by a Gompertz curve of the form $G(x)=\exp [\exp (A-Bx)]$, where $x$ is the normalized individual income. The complementary cumulative distribution of the remaining 1% richest part of the population is well represented by a Pareto power law distribution $P(x)= \beta x^{-\alpha}$. This result means that similarly to other countries, Brazil's income distribution is characterized by a well defined two class system. The parameters $A$, $B$, $\alpha$, $\beta$ were determined by a mixture of boundary conditions, normalization and fitting methods for every year in the time span of this study. Since the Gompertz curve is characteristic of growth models, its presence here suggests that these patterns in income distribution could be a consequence of the growth dynamics of the underlying economic system. In addition, we found out that the percentage share of both the Gompertzian and Paretian components relative to the total income shows an approximate cycling pattern with periods of about 4 years and whose maximum and minimum peaks in each component alternate at about every 2 years. This finding suggests that the growth dynamics of Brazil's economic system might possibly follow a Goodwin-type class model dynamics based on the application of the Lotka-Volterra equation to economic growth and cycle.
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Suggested Citation

  • N. J. Moura & M. B. Ribeiro, 2009. "Evidence for the Gompertz curve in the income distribution of Brazil 1978–2005," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 67(1), pages 101-120, January.
  • Handle: RePEc:spr:eurphb:v:67:y:2009:i:1:p:101-120
    DOI: 10.1140/epjb/e2008-00469-1
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    References listed on IDEAS

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    1. Geoff Willis & Juergen Mimkes, 2004. "Evidence for the Independence of Waged and Unwaged Income, Evidence for Boltzmann Distributions in Waged Income, and the Outlines of a Coherent Theory of Income Distribution," Microeconomics 0408001, EconWPA.
    2. Wataru Souma & Makoto Nirei, 2005. "Empirical study and model of personal income," Papers physics/0505173, arXiv.org.
    3. G. Daniel & D. Sornette, 2008. "Econophysics: historical perspectives," Papers 0802.1416, arXiv.org.
    4. Gaffeo, E. & Catalano, M. & Clementi, F. & Delli Gatti, D. & Gallegati, M. & Russo, A., 2007. "Reflections on modern macroeconomics: Can we travel along a safer road?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 382(1), pages 89-97.
    5. A. Christian Silva, 2005. "Applications of physics to finance and economics: returns, trading activity and income," Papers physics/0507022, arXiv.org.
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    Cited by:

    1. Sarabia, José María & Prieto, Faustino & Trueba, Carmen & Jordá, Vanesa, 2013. "About the modified Gaussian family of income distributions with applications to individual incomes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(6), pages 1398-1408.
    2. Moura, N.J. & Ribeiro, Marcelo B., 2013. "Testing the Goodwin growth-cycle macroeconomic dynamics in Brazil," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(9), pages 2088-2103.
    3. Chami Figueira, F. & Moura, N.J. & Ribeiro, M.B., 2011. "The Gompertz–Pareto income distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(4), pages 689-698.
    4. Bourguignon, Marcelo & Saulo, Helton & Fernandez, Rodrigo Nobre, 2016. "A new Pareto-type distribution with applications in reliability and income data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 457(C), pages 166-175.
    5. Guo, Qiang & Gao, Li, 2012. "Distribution of individual incomes in China between 1992 and 2009," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(21), pages 5139-5145.
    6. repec:eee:phsmap:v:487:y:2017:i:c:p:143-152 is not listed on IDEAS

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